LBO France makes 4x return

Qatari Diar, a wholly-owned subsidiary of the Qatar Investment Authority (QIA), has acquired multinational technology systems company Cegelec from LBO France for an undisclosed sum.

This is the third time that Cegelec has changed financial sponsor, having originally been spun out from parent company Alstom in 2001 for €770 million by French private equity firm CDC Equity Capital and London-based Charterhouse Capital.

LBO France subsequently paid an undisclosed sum for the company in March 2006. While the value of Qatari Diar’s tertiary buyout has not been disclosed, a source close to the deal suggested that LBO France had generated a return of four times its initial investment.

Qatari Diar trumped rival bids from two listed French trade buyers: construction conglomerates Vinci and Eiffage. A third bidder, an unnamed Russian private equity fund, was also involved in the process, according to the source. Qatari Diar proved to be the most “reactive” bidder with the most solid financing, said a source at LBO France.

Cegelec designs, installs and maintains various types of industrial systems for both companies and public bodies undertaking construction projects. Headquartered in France, it operates in around 30 countries and generates a turnover of around €3 billion, according to Qatari Diar’s statement.

Chief executive of Qatari Diar, Ghanim Al Saad, said, “We intend to fully associate Cegelec to all of our development projects in the Middle East, in Europe and Africa, where Qatari Diar is strongly established”.

Qatari Diar is a real estate-focused subsidiary of Qatar’s sovereign wealth fund Qatar Investment Authority.

LBO France has €4 billion under management, about 80 percent of which is in the firm’s eight mid-market funds.